DTN Early Word Grains
Another Green Start to the Week
July corn was 3 cents higher, July soybeans were 8 cents higher, and July Kansas City (HRW) wheat was 3 cents higher.
CME Globex Recap:The grain and oilseed complex traded higher overnight into Sunday morning, with soybeans up almost 10 cents. The wheat complex also saw a solid rally, while corn continues to climb. Energies were mostly lower, with only natural gas showing a small gain, while metals were mixed. The U.S. dollar index and DJIA futures were also higher to start the week.
OUTSIDE MARKETS:The Dow Jones Industrial Average closed 11.15 points lower at 24,311.19, the NASDAQ Composite gained 1.12 points to 7,119.80, and the S&P 500 added 2.97 points (0.1%) to 2,669.91 Friday. DJIA futures were 110 points higher early Monday morning. Asian markets closed higher with Japan's Nikkei 225, Hong Kong's Hang Seng gaining 527.78 points (1.7%), and China's Shanghai Composite closed. European markets were trading higher with London's FTSE 100 up 37.28 points (0.5%), Germany's DAX gaining 17.26 points (0.1%), and France's CAC 40 adding 12.43 points (0.2%). The euro was 0.0016 lower at 1.2115 while the U.S. dollar index gained 0.14 to 91.66. June 30-year T-Bonds were 5/32 lower at 143'03 while June gold dropped $5.40 to $1,318.00. Crude oil was $0.65 lower at $67.45 as Brent crude lost $0.77 to $73.87. China's Dalian soybean futures were closed while Malaysian palm oil futures were lower again overnight.
P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]
| BULL | BEAR | ||
| 1) | National average corn basis firmed last week, indicating continued solid demand for U.S. supplies. | 1) | Corn is technically overbought, a situation that eventually leads to increased selling interest. |
| 2) | The weak carry in the July-to-August soybean futures spread continues to reflect a bullish view of supply and demand. | 2) | Soybeans (cash, old-crop, and new-crop) have not moved to new highs on weekly charts as of Monday morning. |
| 3) | Solid commercial buying in Chicago (SRW) wheat was indicated by futures spreads overnight. | 3) | It would not be surprising to see buying interest in winter wheat markets start to fade as Monday's session progresses. |
The weekly Newsom on the Market column can be found on subscription sites only. On DTN Pro it is in News/Town Hall and on MyDTN in News/Columns.
MORE COMMODITY-SPECIFIC COMMENTSCORN Corn is bullish to start the week, with much of the support continuing to come from the commercial side of the markets. Last week saw the DTN National Corn Index (NCI, national average cash price) post a new high on its weekly close-only chart, supported by firming national average basis. Friday's calculated NCI put it 39 cents under the close of July futures, as compared to the previous week's 41 cents under. In old-crop futures, the carry in the July-to-September futures spread weakened by a 1/2-cent for the week, maintaining its neutral level of calculated full commercial carry. Overnight trade saw the July contract post a high of $4.02, a challenge to its previous high of $4.02 3/4 (March 13). Meanwhile, new-crop December posted a new high of $4.17. Look for Monday's session to show continued buying interest in all three corn markets, with another solid weekly export inspection number for the week ending Thursday, April 26. Initial delivery of 10 contracts was reported against the May issue.
SOYBEANS Soybeans posted a strong rally overnight, with old-crop July adding as much as 11 1/4 cents before pulling back a bit. While soybean markets aren't as bullish as corn, both futures and cash are set to challenge previous highs if buying interest can be maintained through Monday's session. The DTN National Soybean Index (NSI, national average cash price) was calculated at $9.78 last Friday, putting nation al average basis versus the July at 79 cents under, still weaker than what was seen the same week the previous marketing year (72 cents under). As has been discussed in this space before, the key to old-crop soybeans will likely be the direction of the July-to-August futures spread, with last week showing the carry holding at a weak 1 3/4 cents, still covering a bullish level of calculated full commercial carry. Both of these fundamental indicators would suggest a neutral at best weekly export inspection figure to be released later Monday morning. As for new-crop November, the contract looks poised to challenge its recent high of $10.60 during Monday's session. Overnight trade, through early Monday morning, saw the contract post a high of $10.57 3/4. Initial delivery of 415 contracts was reported against the May issue.
WHEAT Winter wheat markets were trading higher early Monday morning, led by what looks to be renewed commercial buying interest in Chicago (SRW). There the new-crop July issue was sitting near its overnight high of $5.06. July Kansas City challenged trendline resistance on its weekly chart at $5.39 overnight, posting a high of $5.37 1/2 before pulling back slightly. If a market sector, in the grain and oilseed complex, starts to weaken Monday it could be wheat. The strength of the U.S. dollar index combined with what is expected to be a lackluster weekly export inspection number (for the week ending Thursday, April 26) could eventually spark selling interest. Initial delivery of 327 contracts was reported against the May Kansas City issue, while no deliveries were reported against the Chicago.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.60 | $0.03 | -$0.39 | Jul | $0.001 |
| Soybeans: | $9.78 | $0.17 | -$0.79 | Jul | $0.005 |
| SRW Wheat: | $4.64 | $0.13 | -$0.34 | Jul | $0.044 |
| HRW Wheat: | $4.76 | $0.11 | -$0.55 | Jul | $0.019 |
| HRS Wheat: | $5.96 | $0.06 | -$0.12 | Jul | $0.024 |
Darin Newsom can be reached at darin.newsom@dtn.com
Darin can be followed throughout the day at www.twitter.com\DarinNewsom
(KR)
Copyright 2018 DTN/The Progressive Farmer. All rights reserved.